Obesity is a worldwide epidemic that predisposes individuals to many age-associated diseases, but its exact effects on organ dysfunction are largely unknown1. Hair follicles—mini-epithelial organs that grow hair—are miniaturized by ageing to cause hair loss through the depletion of hair follicle stem cells (HFSCs)2. Here we report that obesity-induced stress, such as that induced by a high-fat diet (HFD), targets HFSCs to accelerate hair thinning. Chronological gene expression analysis revealed that HFD feeding for four consecutive days in young mice directed activated HFSCs towards epidermal keratinization by generating excess reactive oxygen species, but did not reduce the pool of HFSCs. Integrative analysis using stem cell fate tracing, epigenetics and reverse genetics showed that further feeding with an HFD subsequently induced lipid droplets and NF-κB activation within HFSCs via autocrine and/or paracrine IL-1R signalling. These integrated factors converge on the marked inhibition of Sonic hedgehog (SHH) signal transduction in HFSCs, thereby further depleting lipid-laden HFSCs through their aberrant differentiation and inducing hair follicle miniaturization and eventual hair loss. Conversely, transgenic or pharmacological activation of SHH rescued HFD-induced hair loss. These data collectively demonstrate that stem cell inflammatory signals induced by obesity robustly represses organ regeneration signals to accelerate the miniaturization of mini-organs, and suggests the importance of daily prevention of organ dysfunction.